MBA – purchase apps up, refis down in latest MBA weekly survey

Mortgage applications increased 0.9% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 9, 2018. The Market Composite Index, a measure of mortgage loan application volume, increased 0.9% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 2% compared with the previous week. The Refinance Index decreased 2% from the previous week. The seasonally adjusted Purchase Index increased 3% from one week earlier. The unadjusted Purchase Index increased 5% compared with the previous week and was 3% higher than the same week one year ago. The refinance share of mortgage activity decreased to its lowest level since September 2008, 40.1% of total applications, from 41.8% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.1% of total applications. The FHA share of total applications increased to 10.4% from 10.1% the week prior. The VA share of total applications increased to 10.3% from 9.9% the week prior. The USDA share of total applications remained unchanged at 0.9% from the week prior.

Equifax exec charged with insider trading after massive data breach

By Brittany De LeaPublished March 14, 2018NewsFOXBusiness

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Former Equifax executive charged with insider trading

The Securities and Exchange Commission today said it had charged a former business executive from credit reporting agency Equifax with insider trading, in the wake of the massive breach that compromised the personal information of more than 147 million Americans. Jun Ying, who was next in line to be the company’s global CIO, was one of three executives at the company who dumped millions of dollars’ worth of stock after it was discovered that the company had suffered a massive cyberattack, but before that information was publicly disclosed. According to the SEC, Ying used confidential information to reap benefits of around $1 million from the stock sale, and evaded more than $117,000 in losses. “As alleged in our complaint, Ying used confidential information to conclude that his company had suffered a massive data breach, and he dumped his stock before the news went public,” Richard R. Best, director of the SEC’s Atlanta Regional Office, said in a statement. “Corporate insiders who learn inside information, including information about material cyber intrusions, cannot betray shareholders for their own financial benefit.”

The hack was discovered and stopped by Equifax on July 29, while three top executives, including Ying, collectively sold shares worth nearly $2 million on Aug. 1 and Aug. 2. The public was notified about the breach on Sept. 7. Insider trading is generally punishable by both a prison sentence and civil and criminal fines, according to the SEC. The maximum prison sentence is now 20 years, while the maximum criminal fine is $5 million. As for civil penalties, individuals may be required to disgorge as much as three times the amount of profits gained, or losses avoided. During congressional testimony, former CEO Richard Smith said the executives in question had gone through the proper channels to sell company stock. He also said employees were encouraged to sell their shares during a specific window following an earnings report, which is when the stock sale allegedly happened. Equifax revealed earlier this month an addition 2.4 million consumer accounts had been hit during the 2017 data breach, which took place from mid-May through July of last year. The total number of victims has consequently risen to nearly 148 million.

NAR – millennials lead all homebuyers, even as some can’t escape their parents

Home purchases by millennials ticked up over the past year, but inventory constraints and higher housing costs kept their overall activity subdued and prevented some from leaving the more affordable confines of their Gen X and baby boomer parents’ homes. This is according to the National Association of Realtors (NAR) 2018 Home Buyer and Seller Generational Trends study, which evaluates the generational differences1 of recent home buyers and sellers. The survey additionally found that millennial buyers prioritize living close to friends and family over a home’s location and proximity to schools, and an overwhelming majority used a real estate agent to buy or sell a home. Slightly more than a third of all home purchases were made by millennials over the past year (36%; 34% in 2017), which kept them as the most active generation of buyers for the fifth consecutive year. Gen X buyers ranked second (26%; 28% in 2017), followed by baby boomers (32%; 30% in 2017) and the Silent Generation, those born between 1925 and 1945 (6%; 8% in 2017). Revealing the greater purchasing power needed over the past year, the typical millennial buyer in the survey had a higher household income ($88,200) than a year ago ($82,000) and purchased the same-sized home (1,800-square-feet) at a more expensive price ($220,000; $205,000 in 2017). Millennials also had higher student debt balances than in last year’s survey, and slightly more of them said saving for a down payment was the most difficult task in buying a home.

Other key findings and notable generational trends of buyers and sellers in this year’s 144-page survey include:

– Younger boomers and Gen X buyers increasingly have children and parents living at home

Similar to previous years, younger boomers were the most likely to purchase a multi-generational home (20%), with a noteworthy rise in those indicating the top reason they did was for their adult children (above 18 years old) to live at home (39%; 30% in 2017), as well as their parents (22%; 18% in 2017). The survey also found a growing a share of Gen X buyers buying for multi-generational purposes (15%; 12% in 2017), with a big jump in the top reason being for their adult children (35%; 26% in 2017) and parents living with them (30%; 19% in 2017). “Costly rents and growing student debt balances appear to make living at home more appealing, affordable and increasingly more common among young adults just entering the workforce,” said Yun. “Even in situations where three generations are all cramped under the same roof, it can significantly help some millennials eventually transition straight to homeownership. Eighteen% of millennial buyers in the survey said their family home was their previous living arrangement.”

– Friends and family matter for buyers both young and old

When deciding where to buy a home, quality of the neighborhood is the factor most influencing buyers of all ages, followed closely by convenience to a job for those up to working age (millennials to younger boomers). Interestingly, even more than the location and quality of a school, recent millennial buyers were just as likely as older boomers and the Silent Generation (at 43%) to consider proximity to friends and family. “The sense of community and wanting friends and family nearby is a major factor for many homebuyers of all ages,” said Yun. “Similar to Gen X buyers who have their parents living at home, millennial buyers with kids may seek the convenience of having family nearby to help raise their family.”

– Millennials buying condos in the city at a very low rate

The share of millennial buyers with at least one child continues to grow, at 52% in this year’s survey and up from 49% a year ago and 43% in 2015. With the need for a larger house at an affordable price, over half of millennials bought in a suburban location (52%), while also being more likely than Gen Xers and younger boomers to choose a home in a small town. After climbing as high as 21% in 2015, only 15% of recent millennial buyers purchased a home in an urban area. Led by Gen X (86%) and millennial buyers (85%), a detached single-family home continues to be the primary type of property purchased, and older and younger boomers were the most likely to buy a multi-family home. Only 2% of millennial buyers over the past year bought a condo.

– Regardless of age, most buyers and sellers work with a real estate agent

Buyers and sellers across all age groups continue to seek the assistance of a real estate agent when buying and selling a home. At 90%, millennials were the most likely to purchase a home through a real estate agent, and help understanding the buying process was cited as the top benefit millennials said their agent provided (75%). Overall, at least 84% in every other generation worked with an agent to close the deal. On the seller side, Gen X and older boomers were the most likely to use an agent (91%), followed closely by millennials (90%) and younger boomers (88%). The near universal use of an agent to sell a home helped keep for-sale-by-owner transactions at their lowest share ever for the third straight year (8%). “Especially in today’s fast-moving housing market, consumers of all ages want a Realtor® to guide them through the exhilarating, yet nerve-wracking experience of buying or selling a home,” said NAR President Elizabeth Mendenhall.

US retail sales decline for third straight month in February

US retail sales fell for a third straight month in February as households cut back on purchases of motor vehicles and other big-ticket items, pointing to a slowdown in economic growth in the first quarter. The Commerce Department said on Wednesday that retail sales slipped 0.1% last month. January data was revised to show sales dipping 0.1% instead of falling 0.3% as previously reported. It was the first time since April 2012 that retail sales have declined for three straight month. Economists polled by Reuters had forecast retail sales rising 0.3% in February. Retail sales in February increased 4.0% from a year ago. Excluding automobiles, gasoline, building materials and food services, retail sales edged up 0.1% last month after being unchanged in January. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. Consumer spending, which accounts for more than two-thirds of US economic activity, appears to have slowed at the start of the year after accelerating at a 3.8% annualized rate in the fourth quarter. But spending remains underpinned by a strong labor market, which is viewed by Federal Reserve officials as being near or a little beyond full employment. The economy created 313,000 jobs in February.

Consumer spending could also get a lift from a $1.5 trillion income tax cut package. Slower consumer spending supports expectations of modest economic growth in the first quarter. Gross domestic product growth estimates for the January-March quarter are around a 2% annualized rate. The economy grew at a 2.5% pace in the fourth quarter. But revisions to December data on construction spending, factory orders and wholesale inventories have suggested the fourth-quarter growth estimate could be raised to a 3.0% pace. The government will publish its third estimate for fourth-quarter GDP growth later this month. In February, auto sales fell 0.9% after a similar drop in January. Receipts at service stations declined 1.2%, reflecting lower gasoline prices. There were also declines in sales at furniture stores, health and personal care stores and electronics and appliance stores. But there were some pockets of strength in the report. Sales at building material stores increased 1.9% last month. Receipts at clothing stores gained 0.4% and sales at online retailers surged 1.0%. Sales at restaurants and bars rose 0.2%. Receipts at sporting goods and hobby stores jumped 2.2%.

MBA – February new home purchase mortgage applications increased 4.6% year over year

The Mortgage Bankers Association (MBA) Builder Applications Survey (BAS) data for February 2018 shows mortgage applications for new home purchases increased 4.6% compared to February 2017. Compared to January 2018, applications increased by 3%. This change does not include any adjustment for typical seasonal patterns. “Mortgage applications for new homes continued to grow in February on a year over year basis, although at a slower pace of just under 5%, as brisk activity in January likely pulled forward some buyer activity,” said Lynn Fisher, MBA Vice President of Research and Economics. “Combined, applications in January and February were up by 11% relative the same period last year. On a seasonally adjusted annual basis, our February estimate of new home sales based on mortgage applications came in at 632,000, ahead of the January Census estimate of 593,000 new homes sales, and back on trend following an uptick from hurricane-related rebuilding.” By product type, conventional loans composed 70.8% of loan applications, FHA loans composed 15.7%, RHS/USDA loans composed 1.1% and VA loans composed 12.4%. The average loan size of new homes decreased from $338,918 in January to $338,078 in February. The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 632,000 units in February 2018, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors. The seasonally adjusted estimate for February is a decrease of 9.7% from the January pace of 700,000 units. On an unadjusted basis, the MBA estimates that there were 55,000 new home sales in February 2018, an increase of 1.9% from 54,000 new home sales in January.

Black Knight announces pricing of secondary offering of common stock and repurchase of common stock

Black Knight, Inc. announced the pricing of the previously announced underwritten public offering by affiliates of Thomas H. Lee Partners, L.P. (together, the “Selling Shareholder”) of 8,000,000 shares of the Company’s common stock at a public offering price of $49.00 pursuant to a shelf registration statement filed with the Securities and Exchange Commission (the “SEC”). The Company has agreed to repurchase from the underwriter 1,000,000 shares of the 8,000,000 shares of common stock being sold by the Selling Shareholder at a per-share purchase price equal to the price payable by the underwriter to the Selling Shareholder. As such, only 7,000,000 shares of the 8,000,000 shares of common stock being sold by the Selling Shareholder will be sold to the public. The Selling Shareholder will receive all of the net proceeds from this offering. No shares are being sold by the Company. The offering is expected to close on March 15, 2018, subject to customary closing conditions. Goldman Sachs & Co. LLC acted as the sole underwriter for this offering.